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... Hypothetical question: Say I retire (eventually) with $2M in assets & live on $80K (4%) the first year, but my assets grow to $2.1M by the end of the year.....

The $100K in asset growth pulse the $80K withdrawal is a total of $180K, which is just 9% of the original two million. With a reasonable mix of stocks and bonds this really isn't all that unusual of a return

To reset it each year you have this type of return will greatly increase your odds of having a couple of below average years kick off your “official” retirement which is very hard on a portfolio.

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